State Farm is seeking a 30% rate hike for California homeowners: Here's what to know

San Francisco — Many California homeowners are worried about their home insurance, and that concern grew stronger Friday when State Farm requested its largest rate hike ever, a sign that they are struggling financially.

“It's important to understand that nothing has changed today for State Farm policyholders,” said Michael Soler, a spokesman for the California Department of Insurance.

State Farm is seeking a 30% rate hike next year, following a recent rate hike of about 20% because they let many policyholders go.

They are the largest residential home insurer in California, insuring 1 in 5 homes.

Related: State Farm is not renewing insurance for 30,000 homeowners in California, including high fire risk areas

According to the San Francisco Chronicle, the insurance company is seeking a 52% increase for renters and 36% for condo owners.

“The rate that State Farm filed yesterday (Thursday) is implementing a part of the insurance law that is very rarely used,” Soler said.

“This regulation is meant to address the financial solvency of a company. That's what they're saying and we'll take a close look at it, and we have some serious questions about State Farm's financial condition and we're going to get to the bottom of it.”

Related: State Farm Insurance says some CA homeowners can continue their insurance coverage, but there's a problem

Some California homeowners received notice that they can continue their State Farm insurance coverage — but the policy may not cover fire damage.

In a statement Friday, State Farm told KGO-TV, “State Farm General is working toward its long-term sustainability in California. The rate changes are being made due to the increased costs and risks.”

The California Department of Insurance said it is completing regulatory amendments that will give homeowners more insurance options in 2025.

“The insurance crisis that we're going through right now is one of the biggest problems that Californians are facing, you don't have enough choices, particularly if you're in a location that's prone to any type of wildfire. So we're looking at some changes to insurance regulations that are long needed and long overdue reforms that will provide more choices for consumers,” Soler said.

Related: State Farm home insurance in California to rise by 20% on average, according to report

State Farm customers will likely see their rates increase on their renewal date in 2025, but not immediately.

“I think we'll see rates increase significantly in the near future and hopefully stabilize in a couple of years, but we're not in that position yet,” said Joel Locher of United Policyholders.

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